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What Cannabis Retailers Can Learn From Marie Kondo

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What Cannabis Retailers Can Learn From Marie Kondo

How to declutter your cannabis inventory and make room for the products that spark joy for consumers

By now, almost everyone has heard of Marie Kondo. She’s the professional organizer turned best-selling author and TV sensation, thanks to her Netflix, Inc. (NASDAQ: NFLX) show “Tidying Up.” The KonMari Method takes people through a multi-step process of decluttering personal messes, keeping only items that “spark joy.”

Through her work, Kondo helps everyday people pare down the disorganization that lurks in their homes. But on careful inspection, there are lessons for cannabis retailers, as well.

Mindful Inventory

Having inventory on hand is key to a keeping sales moving. If you under-stock, you risk unsatisfied customers waiting for orders to be filled. But too much inventory can tie up working capital or – even worse – lead to losses if it can’t be moved.

Any new business has a learning curve and needs time to figure out how to properly align supply with demand. But even established large companies can get this wrong. Lululemon Athletica inc. (NASDAQ: LULU) and Nike Inc (NYSE: NKE) are just two examples of multinational companies that were dogged by having more product than they could sell. While these failures pinch large businesses, they can deliver a bigger blow to cannabis startups that pin their future expansions on wasted inventory.

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A shift in consumer trends can mean selling surplus stock at a steep discount. Further complicating matters, many cannabis items have expiration dates. Spoiled stock isn’t fit for even bargain basement sales – a complete loss. Another problem is that excess inventory forces retailers to sit on existing products, while newer, more exciting merchandise that customers crave comes to market.

The key is to not necessarily minimize inventory, but be mindful and pay attention to POS data to weed out what your store actually needs. Be mindful of not overstocking during holidays, too. While it might be tempting to order more product at a discount, that strategy can backfire if it doesn’t sell.

A less-is-more ethos can co-exist with shrewd business sense and powerful data.

Sales That Spark Joy

Does your inventory speak to your market? Knowing your core customers – and serving them first – is the best way to build a solid foundation.

Your inventory needs to reflect their tastes, preferences and price points. Track sales with a comprehensive POS system and target inventory to meet the needs of your prioritized customers. Once you’ve built a solid following with them, you can supplement your inventory to serve other market segments.

Another key component is to localize merchandise according to each store's clientele. Each location should take into consideration their unique demographics, store size and trends. A store located in a young, urban downtown will have a different profile than a store with an older, Boomer population.

Everything from in-store retail messages to fixture displays should be optimized to spark joy and fill the customer’s needs. Localization is a driving force of customer satisfaction and loyalty – not to mention a superior retail experience.

As Marie Kondo and her faithful followers continue on their quest towards perfectly organized cupboards, the movement should serve as a reminder to retailers. Mindfully watch your inventory and provide a customer experience that sparks joy.

Ryan Smith is the CEO of LeafLink, an online marketplace for wholesale cannabis.

Photo by Javier Hasse.

Posted-In: KonMarie Marie KondoCannabis Psychology Markets General Best of Benzinga

 

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